An Apple Music contract has been leaked containing details about how it will pay independent music labels for music that is streamed during the service's trial period.
According to the contract, Apple won't actually compensate independent labels, and speculatively unsigned artists, at all for music streamed during that period.
Following the leak, Apple's Robert Kondrk was interviewed, confirming that the company will not pay royalties for streams during the trial period. Apple will, however, pay independent labels and unsigned artists a little more than the standard rate, paying 71.5 percent of revenue within the U.S., and 73 percent outside the U.S. Spotify, by comparison, pays 70 percent.
When it comes to major record labels, however, Apple will be negotiating deals separately. Not only that, but rather than negotiate with Merlin, a company that takes care of licensing agreements and deals for a number of independent record labels, Apple wants to negotiate directly with the labels. Many independent labels have worked with Apple directly in the past, but that was before Merlin existed. These labels now prefer to go through Merlin, but Apple refuses.
Of course, while Apple pays close to the industry standard for music streaming, it is likely that Apple's service will be more lucrative compared with others because of Apple's reach and the fact that Apple does not have a free ad-supported option for customers. Spotify, however, argues that Apple essentially offers a free tier in iTunes Radio and Apple's new BeatsOne 24/7 radio station, played through Apple Music.
In fact, reports suggest that many independent labels have not signed the agreement, and do not intend to sign it as it currently stands. This means that both labels and Apple may be losing out when Apple Music is launched in a few weeks, unless, of course, Apple changes deals in a way that satisfies labels.
Apple Music itself was announced at Apple's Worldwide Developer Conference on June 8. The service will cost the industry standard of $9.99 per month, and will launch officially on June 30. One of the main selling points of the service will be the fact that it features playlists curated by music industry professionals. Not only that, but it will feature a 24/7 radio station called RadioOne, which will be run by BBC DJ Zane Lowe.
Apple is a little late to the game when it comes to music streaming, but many suggest that Apple's billions of dollars, plus the fact that it will be able to leverage millions of Apple device users, will help the company quickly rise as a prominent player in the streaming business.
